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Watching the watchmen: Parliamentarian opinion on regulators

In the first of our three part series on regulation, we discussed MPs’ confidence in markets and regulation based on new Populus polling of MPs. In the same poll, we also asked MPs about their views on the industry watchmen – the effectiveness, funding and remit of regulators.

The least trusted industries are seen by MPs to have the least effective regulators – only one fifth of MPs think the Gambling Commission and the Independent Press Standards Organisation (IPSO) are effective. Overall, most MPs think industries, not taxpayers, should fund their regulators and that regulators should be more proactive in seeking out wrongdoing.

Do MPs think regulators are effective?

Asked to rate the regulators, views of six of the ten regulators – the Civil Aviation Authority, General Optical Council, Food Standards Agency, Advertising Standards Authority, the Pensions Regulator, and Ofcom – are positive, if sometimes only slightly so.

The Charity Commission and Ofgem are both viewed neutrally.

There are only two regulators which most MPs think are ineffective – the Gambling Commission and the Independent Press Standards Organisation (IPSO).

The perceived effectiveness of the General Optical Council is difficult to determine, as only 37% of MPs say they know what it does. Those that do know the General Optical Council, however, are clearly supporters.

For most regulators, there is little difference in opinion between MPs from different parties. There is only one regulator that significantly divides opinion in the House: the Charity Commission. Only 27% of Conservative MPs see it as an effective regulator, whereas 49% of the Opposition thinks so.

Chart 1

Proactivity

Overall, regulators should be more concerned that they are doing too little rather than too much. Only one quarter (25%) of MPs believe that regulators tend to exceed their original remit and become an excessive burden on the industry they regulate. Taking pre-emptive action seems to be a basic expectation of a regulator’s role, rather than going above and beyond their responsibilities. Many MPs (67%) believe that regulators need to be more proactive in seeking out wrongdoing, even if that costs more than waiting for a complaint. Opposition MPs feel most strongly about this (84% agree), although more than half (51%) of Conservative MPs also agree.

Chart 2

Industries should pay for their regulators

When it comes to funding, MPs are more likely to support regulators being funded by the industry that is being regulated than by the taxpayer (63%). This funding model is currently in place, in some form, for many regulators including Ofcom, Ofgem, IPSO, the Gambling Commission, the Civil Aviation Authority, the Advertising Standards Authority and the General Optical Council. Only the Food Standards Agency, the Pensions Regulator and the Charity Commission are government-funded.

Chart 3

This raises important questions about funding models for any new regulators, as it seems unlikely that new regulatory bodies would receive government funding. Current taxpayer-funded regulators are also already facing restricted budgets; with the former Chancellor announcing in his November 2015 spending review that the Food Standards Agency and the Charity Commission’s funding would freeze over the next four years.

The funding freeze has prompted outrage from the charity sector and a consultation about the possibility of charging charities for their own regulation. One concern is that a charity-funded Commission would not be perceived as independent and public confidence would be shaken. However, our poll among MPs indicates that a regulator’s perceived effectiveness is not solely down to whether it is industry or taxpayer funded. We found that only 24% of MPs thought that regulators should be less independent and more accountable to government, highlighting that other factors, such as a reputation of independence, are likely to be important.

Furthermore, last year’s Populus research about trust and confidence in the Charity Commission found that only one quarter (25%) of the general public said the charities regulator should be funded entirely through general taxation. This appears to be in line with parliamentarians’ views and would supports the Chancellor’s decision to freeze funds. The alternative, however, is not as straightforward as assuming that most other people favoured funding to come entirely from charities. An equal split between taxation and charging a fee to charities was the most popular option (32%).

This is the second in a three-part series about regulation. The first part discussed MPs’ confidence in markets and regulation [LINK]. Part three will compare and contrast MPs’ views with those of the public.

You may also be interested in our recent work for the Charity Commission, the regulator for the charity sector, which reveals falling public trust and confidence in charity sector.

Methodology

    • Populus surveyed 122 MPs on the Populus MP Panel in March and April 2016 by self-completion online and postal questionnaire.

    • Data is weighted by political party to be representative of the House of Commons.

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